Key foreign currency earner export items lose sheen

The key foreign currency earner export items have lost their sheen in last five years.
The weightage of garments, woolen carpet, textile -- the key export items -- have plunged by almost half in the Manufaturing Price Index (MPI) in this fiscal year comapared to the fiscal year 2007-08.
The weightage of garments -- one of the key export items -- has dropped by almost seven times to 1.17 per cent in the current fiscal year from 7.14 per cent in the 2007-08, whereas the weightage of woolen carpet -- another key foreign currency earner -- has dropped by half to 2.91 per cent in the current fiscal year from 4.32 per cent in the 2007-08, according to the Central Bureau of Statistics (CBS).
"Similarly, the weightage of other textile has dropped to 4.17 per cent in the current fiscal year from 6.59 per cent in the 2007-08, whereas pashmina -- yet another key export items -- could not make it to the Index due to its meagre weightage in the Index this time compared to 2007-08, when it had 1.18 per cent weightage in the index.
However, the items of domestic consumption have more weightage in the latest Manufacturing Price Index.
Due to plunge in the key manufacturing items, the Manufacturing Price Index has recorded a growth of a mere 1.23 per cent in the second quarter compared to the first quarter of this fiscal year. In the fiscal year 2007-08, the MPI had recorded a growth of 10.76 per cent over a fiscal year ago.
Entrepreneurs blame the higher cost of production for the drop in the manufacturing. "Increasing cost of production due to frequent labour troubles, power-outage and unfavourable security situation in the country has brought the key exports manufacturing down," said president of Federation of Nepalese Chambers of Commerce and Industry (FNCCI) Kush Kumar Joshi.
"Our products have been loosing competitive edge over other countries' products," he said, adding that the labour and energy could have been our advantages, had the government acted on time to boost the manufacturing and investment climate.
The Manufacturing Price Index has this year listed 44 items based on 2006-07 manufacturing census from earlier 34 items -- that was based on 2001-02 manufacturing census -- to make it more inclusive, said director of National Accounts Division at the CBS Suman Raj Aryal.
"The addition of new commodities is also due to diversification of industry lately," he said, adding that some new industries have made it to the list and the old ones are on the way out as their weightage have started shrinking.
The new industry like furniture has been added, though it has a meagre 0.56 per cent weightage in the Index.